Benjamin Lawsky, superintendent of the New York State Department of Financial Services in New York on Oct. 19, 2011. / File photo by Jin Lee, Bloomberg via Getty Images

by Darrell Delamaide, USA TODAY

by Darrell Delamaide, USA TODAY

WASHINGTON - Crusading against Wall Street has launched many a political career in New York, and the state's current top financial regulator may prove to be yet another.

At least for now, however, Benjamin Lawsky, a former federal prosecutor who is the first head of a powerful new regulatory agency, seems more interested in actually taming the banks.

Lawsky made waves early in his tenure in 2012 by jumping ahead of federal regulators to fine the British bank Standard Chartered a whopping $340 million to settle allegations that it helped launder billions in Iranian funds through New York. A year later, he collected $250 million from Bank of Tokyo-Mitsubishi UFJ in a similar settlement.

This week, Lawsky said he was setting his sights on individual wrongdoers, not just big corporations.

"Corporations are a legal fiction," he said in an interview with the Financial Times. "You have to deter bad individual conduct within corporations. People who did the conduct are going to be held accountable."

It has been a sore point in the wake of the financial crisis that even though big institutions have forked over billions to settle charges of fraud and other illegal actions, no individuals have been named or charged, though clearly it is individuals who knowingly conducted this activity.

Lawsky, as superintendent of New York's Department of Financial Services, does not have the authority to prosecute criminal charges. But he can impose civil penalties such as suspensions, industry bans and clawbacks, according to the FT interview, as well as simply exposing bad actors in detailed allegations.

Lawsky's latest salvo comes after recent probes of the rapid growth of mortgage servicers like Ocwen and Nationstar, which he suspects of reviving the abuses that led to the financial crisis, and of several big banks for possible manipulation of currency markets.

Since its creation in 2011, the department has also gone after payday lenders, abusive debt collectors and public pension fund advisers.

The DFS combined the state's banking and insurance departments, two of the oldest financial regulators in the country, dating to the 1850s.

New York Gov. Andrew Cuomo personally recruited his one-time chief of staff, who spent five years as a prosecutor in the U.S. attorney's office in the New York Southern District, to serve as the first superintendent of the combined agency.

Wall Street, of course, does not generally refer just to the eight-block street in lower Manhattan but to the entire U.S. financial industry. Nonetheless, the street itself is in fact in New York, historically our nation's financial center, giving the state's officials a special role.

Most notably in recent times, it was the crusade of then-Attorney General Eliot Spitzer against abuses in securities underwriting and mutual fund trading in the early 2000s that propelled him into the governor's mansion and a potential national career before it was cut short by scandal.

The current New York governor, Andrew Cuomo, also took his turn at probing bank abuses when he was state attorney general, particularly in subprime mortgage securities and student loans. He is riding high in the polls as he faces re-election and is often mentioned as a potential candidate for the Democratic presidential nomination in 2016.

The current attorney general, Eric Schneiderman, has been active in settlements for mortgage abuses and is widely perceived as wanting to follow in Spitzer's and Cuomo's footsteps to use the office as a springboard to the governorship.

Lawsky, who turns 44 next month and who worked for Sen. Charles Schumer, D-N.Y., in Washington as well as for Cuomo, may well have political ambitions after that kind of mentoring.

At least in the past, banking or insurance superintendent has not been a launching pad for political office. The combined agency, however, oversees more than 4,000 institutions with assets topping $6 trillion, giving it potentially a higher profile.

In any case, Lawsky seems intent on bringing a prosecutorial mind-set to a position that usually was occupied by someone with a background in the very industry being regulated. The last official banking superintendent, Richard Neiman, for instance, worked at Citicorp and a New York affiliate of Toronto Dominion Bank before taking the regulatory post.

Lawsky also belongs to a different generation. He uses Twitter, has appeared on the social networking site reddit, and has created a stir in the Internet community because of his openness to the digital currency Bitcoin and his willingness to look at New York as a potential center for virtual currency firms under an appropriate regulatory framework.

If Lawsky follows through on his pledge to expose individual wrongdoing on Wall Street, it would set him even further apart from other financial regulators and earn him a fair amount of political capital, whatever his ambitions might be.

Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for Dow Jones news service, Barron's, Institutional Investor and Bloomberg News service, among others. He is the author of four books, including the financial thriller Gold.